Chao family: silent partners in Orange County healthcare

Chao family support has built UCI Health’s comprehensive cancer center into a community resource — and much more

June 26, 2017

The four Chao siblings and their spouses – along with their father and adult children – have donated nearly $30 million to UC Irvine, quietly transforming cancer research and healthcare in the region. Shown are (front row, from left) June Chao, Agnes Kung, Lee Chao and Phylis Hsia and (back, from left) Richard Chao, J.K. Kung, Allen Chao and David Hsia.

Their name may be on UC Irvine buildings, but members of the Chao family prefer working behind the scenes to improve the health of the community.

Since their first gift to the university in 1995, three generations of Chaos have given nearly $30 million to the campus, quietly reshaping cancer research and healthcare in Orange County and beyond.

Recently, the second-eldest of the four Chao siblings, Allen Chao, agreed to discuss the story behind the family’s philanthropy, but only because doing so might raise awareness of UCI Health’s Chao Family Comprehensive Cancer Center as a community resource.

The tale he tells includes a brush with death, a tranquilizer that treats schizophrenia and a dash of motherly wisdom. It begins in the late 1960s, when the siblings — Allen, Agnes, Phylis and Richard — trickled out of Taiwan to attend colleges in the United States.

Allen Chao started his U.S. career at G.D. Searle, when it was still a family-owned and ‑operated pharmaceutical business. Eventually, he determined that he’d rather have his own family’s name on his business card.

In 1984, he co-founded a generic drug manufacturing company with brother-in-law David Hsia, Phylis’ husband and a fellow Purdue University alumnus. After being rebuffed by banks and venture capital outfits, they turned to relatives and friends in California for startup funding and launched Watson Pharmaceuticals — the maiden name of Chao’s late mother, Hwa, combined with “son” — headquartered in Corona.

Specializing in niche products, such as Loxapine for schizophrenia, and innovative delivery systems, such as skin patches and nasal sprays, the business flourished. By the time Chao and Hsia retired in 2008, Watson was a $3-billion behemoth. (It was later renamed Actavis and then Allergan, after acquiring those companies.)

Not surprisingly, the family’s health industry background influenced its charity choices. Patriarch H.H. Chao, who died in 1999, owned a generic drug firm in Taiwan before moving to California in the early 1970s. And three of his grandchildren — the sons of Agnes, Allen and Richard Chao — have medical degrees.

"As healthcare professionals aware of the pain and suffering caused by cancer, the idea was that we should do something to help," Allen Chao says of the siblings’ original decision to donate to UC Irvine's cancer center. It also reflected his mother’s longtime admonition to give back to the community. "Remember where you came from and who made you successful," he recalls her saying.

Initially, the family had no personal ties to the university or the disease. But that soon changed. In 1999, Allen Chao developed stomach cancer. He sought the care of UC Irvine gastroenterologist Dr. Kenneth Chang, who was able to remove all signs of the disease.

Chao and his brother and sisters made a new gift that would continue the study of the relationship between genes and tumors and introduce research and education programs aimed at Asian Americans, who have the highest rates of liver and stomach cancer in the nation.

"The first donation was made from the outside looking in," he says. "When I personally got a scare, I was more grateful for UCI and wanted to improve cancer prevention and outreach."

The siblings’ father, spouses and adult children have also contributed to UC Irvine over the years, mostly to support medical research but also to launch a cancer lecture series and help fund innovative campus and hospital construction projects. "We get an idea, discuss it among ourselves and make a decision," Allen Chao says. "Whoever wants to join can participate."

UC Irvine Medical Center is home to Orange County's only hospital where patients can find experts in every type of cancer and take part in early-phase clinical trials of experimental drugs, he says. It also runs a transgenic mouse program that creates genetically engineered rodents for tumor research at UC Irvine, UCLA and 30 other institutions.

In the late ’80s, around the time UC Irvine began to formalize its cancer center structure and pursue a National Cancer Institute designation, several other local hospitals offered similar cancer services, according to Chang, who leads the university’s H.H. Chao Comprehensive Digestive Disease Center (CDDC). But — thanks in no small part to the Chaos — "nothing in Orange County now comes close to providing the level of care that cancer patients receive at UCI," Chang says.

The cancer center often offers techniques and treatments — from endoscopic ultrasound for early diagnosis to promising brain tumor therapies — before they’re available elsewhere.

One of the Chao family’s chief missions is improving access to affordable, high-quality healthcare. It inspired their generic drug business and also animates their new generic biologics firm, Tanvex BioPharma, which seeks to affordably mimic costly large-molecule pharmaceuticals that combat arthritis, allergies, cancer and psoriasis.

When asked about drug companies that have come under fire for astronomical price increases, Allen Chao says his father taught him a different approach. "The purpose of making pharmaceuticals is to help people," he says. "Yes, you need to get your investment back so you can do more research and create more jobs, but some businesspeople love to create more money by doing more expensive drugs. I don’t think that’s the proper way to make a profit."

Aiding the community also informs the family’s philanthropy, Chao says. For example, cancer patients often spend hours receiving infusions and other treatments, so it’s important that Orange County residents have care facilities nearby that means they don’t have to drive to Los Angeles, he explains. The family's gifts further enhanced patient comfort by supporting a remodel of the cancer center that made the ambience of the infusion center more like a hotel than a hospital, say UC Irvine cancer center officials.

Most recently, the family has funded two endowed chairs at the cancer center, which improves its ability to win grants and recruit nationally known researchers, says Van Etten, recipient of the Chao Family Endowed Director’s Chair in Cancer Research and Treatment. It will also support investigations into blood cancers and hereditary tumor links.

Gastroenterologist Chang says the family’s generosity has ripple effects that span the globe. “The medical student training, the research publications and the treatment breakthroughs coming out of this place are helping countless patients,” he says. "The Chao donations are the proverbial gift that keeps giving. I don’t think they even know the full impact. They’re so unassuming and down-to-earth."

Van Etten echoes that assessment, adding, "Their gifts help give us the resources to conduct transdisciplinary research into the causes, prevention and treatment of cancer – and to serve our Orange County community."

Allen Chao sees the impact in simple terms: "Cancer is so debilitating. Anything we can do to help patients, doctors and families – we just think that’s the right thing to do."